SAP's A1S still shrouded in the mists

SAP's A1S still shrouded in the mists

Summary: Guest post: AccMan blogger and deep thinker on enterprise software Dennis Howlett, along with some of the other Enterprise Irregulars, is in Vienna for SAP's Euro Sapphire conference. It covers the same material as Sapphire Atlanta, which Dennis attended and took place last month.

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TOPICS: SAP
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Guest post: AccMan blogger and deep thinker on enterprise software Dennis Howlett, along with some of the other Enterprise Irregulars, is in Vienna for SAP's Euro Sapphire conference. It covers the same material as Sapphire Atlanta, which Dennis attended and took place last month. Similar to the Atlanta conference, the much discussed A1S on demand suite destined for the mid-market is still kept behind the curtains, earning the moniker "vaporware" from Dennis in this report:

At SAPPHIRE Vienna, I asked Hans-Peter Klaey, SAP president of global SME, how many partners will SAP need/have as it makes read to go to market with A1S? There was no direct answer:

“We are not Microsoft. We’re not shouting for quantity, we want quality."

Nigel Montgomery, director European Research at AMR, thought it was a stupid question because he's not convinced it's a numbers game. But it is. A1S is central to SAP's declared intention to reach a customer count of 100,000 by 2010 and the current customer acquisition run rate is nowhere near the figures they will need to achieve that goal. Hans-Pater confirmed the current net new customer names rate of around 6,000 per annum. Later Nigel recanted, saying that it was actually a good question because SAP doesn't seem clear where those partners are going to come from and needs to articulate that message. A1S excludes their traditional tier one systems integrators. They're not going to get out of bed for a $50,000 deal that might involve $100,000 in implementation costs for a service that will not be configurable outside the options SAP gives you. This might attract the tier two implementers but then how will businesses differentiate themselves when they're operating the same business processes as the competitor next door?

As Sig Rinde says: "Customers are going to need software as a customizable service." But this is not on the agenda. At least not for the time being. But there are other issues that impact on SAP's A1S go to market strategy. In conversation, Henning Kagermann said: "The biggest challenge for launching A1S is ensuring we get the culture for the on-demand model right. It is difficult to have a profitable service." And he's right. SAP is used to a value based sales model whereas A1S will be a low cost volume play. Even so, SAP is determined to get this right. As Charlie Wood reports of Pascal Brosset, SVP marketing strategy:

"I'm religious about making software-as-a-service happen"

I asked Charlie for his take:

"The vast majority of SAP, to the extent that they know about it, don't necessarily believe in A1S. They see it as new but unproven. They're letting it grow outside the mainstream and according to some execs, they want to see it as successful but it's very much a case of wait and see."

The most infuriating thing is that we still haven't seen the service beyond the canned demonstration SAP reprised from the analyst presentation in Atlanta. Like others, I want to get my hands on A1S to see what it really does. But SAP is not letting anyone other than its 150 or so test customers anywhere near the service. As further evidence of the control SAP wants to keep on AIS is its decision to host the service itself until it becomes established. I really want SAP to succeed because it represents a validation for the market but for as long as it holds its cards behind its back, A1S is...vaporware.

Fuzzy photo of A1S prototype from the Vienna Sapphire presentation by David Terrar

See also:

SAP's mid-market strategy with SaaS (David Terrar)

SAP’s mid market strategy, A1S and a demo of sorts (David Terrar)

Quotes from SAPPHIRE More quotes (Charlie Wood)

Oracle’s tastelessness (Dennis Howlett)

Live blogging Kagermann’s Vienna Sapphire (Thomas Otter)

SAP Sapphire short notes (Sigurd Rinde)

Redmonk, straight talk and no hype

Bloggers meet SAP's CEO Henning Kagermann: Charlie Wood, Dennis Howlett, Prasanth Rai, Henning Kagermann, James Governor, Mike Prosceno (SAP PR), David Terrar (Photo: David Terrar)

Topic: SAP

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